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13 August 2016, Gateway House

Acting East, with intensity

India’s East Asia policy has been a bedrock of the country’s foreign policy, and the Modi government has deepened ties with ASEAN and extra-ASEAN powers in a significant way. As India turns 70, it is worth assessing the few key bilaterals that will now become more important for regional security and prosperity.

Distinguished Fellow, Foreign Policy Studies Programme

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As India prepares to celebrate its 70th Independence Day, the country’s record of achievements, setbacks and challenges in the domain of national security and foreign policy – from the Nehru era to the Modi years — will come under the scanner. In this context, a review and assessment of the Modi government’s approach to East Asia through its Act East Policy (AEP), now completing two years, will be useful.

Overall, the East Asia policy has been largely successful, receiving a significant momentum under PM Modi’s leadership. East Asia is a region he knew well personally before becoming prime minister through his various visits there in the past as Chief Minister of Gujarat.

Thus, the investment of political capital that he has made to deepen and widen ties with ASEAN as well as extra-ASEAN powers has been quite remarkable. This is indicated by a series of high-level visits by top Indian leaders to the region and the reciprocal visits in the past 20 months.

Most significant has been the switch from the Look East Policy (LEP) to the Act East Policy (AEP) in November 2014. It was neither a mere rebranding exercise nor the launch of a new look at policy but was a notable policy upgradation. The new policy appropriately accords higher priority to a region which today is witnessing the sharpest international power play involving the U.S. and China.

Both the key components of AEP – ties with ASEAN and with other powers (e.g. China, Japan and the U.S.) – came into clear focus last month at the meetings of foreign ministers at the India-ASEAN Summit and the East Asia Summit, held in Vientiane (Laos) on July 25 and 26 respectively. The summits themselves will take place in September.

India’s representative at those meetings was Minister of State for External Affairs, General (retd.) V.K. Singh. Speaking at the meeting with ASEAN foreign ministers, he stressed that ASEAN-India relations were not just about   shared civilisations and history, but also about the strategic fundamentals of economic growth, prosperity, peace and stability. In this regard, a close look at a few specific issues should be indicative of the current state of play.

First, trade between India and ASEAN has been on the decline, whereas growth in investments is reportedly robust. The target for bilateral trade was $100 billion by 2015, but trade today is just $65 billion. Concluding the long negotiations for the Regional Comprehensive Economic Partnership (RCEP) by end 2016, will certainly help. However, this timeline may be slipping from the hands of governments. The ASEAN side has been nudging India for more active cooperation, while India is insisting, legitimately, that it wants “a balanced” RCEP agreement, one that shows ambition in goods, services and investments equally.

Then there is India’s offer of a new $1 billion line of credit for connectivity projects with ASEAN announced by the Prime Minister in November 2015, but which are yet to be identified. . Officials in Jakarta, where the ASEAN Secretariat is located, are engaged in crafting “modalities,” according to ASEAN diplomatic sources. Meanwhile, to provide a push, the Indian side presented in Vientiane three concrete proposals on digital connectivity: an optical transmission network, e-networks for tele-medicine and tele-education, and GPS-aided geo-augmented navigation.  ASEAN has yet to respond with alacrity to India’s constructive initiatives.

Thirdly, New Delhi’s idea of setting up a Special Purpose Vehicle (SPV), with an initial capital of $100 million, for public-private-partnership projects in four CLMV countries (Cambodia, Laos, Myanmar and Vietnam) is turning into a tangible proposal, albeit at a slow pace. It will need proactive promotion by India so that, in keeping with AEP’s stress on action and implementation, a few projects actually become a reality soon.

Finally, strengthening the perception that most new proposals for cooperation emanate from the Indian side, Minister of State for External Affairs V.K. Singh spelt out the possibilities of forging new links to promote co-operation in science and technology (S&T) particularly in the domains of renewable energy, space and Information and Communication Technology (ICT). India has increased its contribution to the S&T Fund from $1 million to $5 million. A greater responsiveness by ASEAN member-states could result in early progress.

As regards the extra-ASEAN facets of AEP, India’s handling of issues of the South China Sea, in light of the recent award by the Permanent Court of Arbitration Tribunal, has been marked by patience and realism. Fissures within the ASEAN are viewed as a serious, though understandable, handicap. Nevertheless, ASEAN centrality and a dialogue-centred approach are integral components of India’s policy.

So, South Block continues to urge reform of the regional security architecture and promote, in particular, “synergy” among the East Asia Summit (EAS), ASEAN Regional Forum and ASEAN Defence Ministers’ Meeting with the hope of creating greater harmony in the region. With voices of triumphalism coming from Beijing, and the current U.S. President becoming a lame duck, little progress may be expected this year on turning the EAS into a truly effective institution.

Against this backdrop, a fresh focus on a few key bilateral relationships may become more important than before. After months of divergences and tensions, India’s ties with China now need to be marked by calibrated conciliation or measured improvement in relations. The next G20 and BRICS summits present useful opportunities for this purpose. The on-going visit of Chinese Foreign Minister Wang Yi to Delhi, therefore, assumes considerable significance.

Bilateral relations with Japan, both in the strategic and economic domains, need to be deepened further.

Indonesia certainly deserves greater attention at the high political level.  The visit by the Indonesian President to India is long overdue.

Interactions with Myanmar, a country at a critical stage of development, too must be enhanced. Aung San Suu Kyi, who is, de facto,  the highest leader and the choice and voice of her people, should be invited with due respect to visit India. A mechanical, protocol-oriented approach may not suffice. Arranging a high-profile address by her before the Indian Parliament could be a winning move. When she visits Washington in September, she will do so at the invitation of the U.S. president. She is also assured of a warm welcome when she visits Beijing next week.

Of late, the Indian government has given heightened attention to development and connectivity projects in the North East. This will play a critical role in building both physical and other engagements with South East Asia. Already, civil society interactions are on the rise, like the 8 August 2016 launch of the ASEAN Study Centre in Shillong. Linking these regions – essentially looking from our Northeast in order to Act East – can be a winner for India and Asia.

When the India-ASEAN and EAS summits take place in September, there will be an opportunity to score more gains for India. As the policy completes 25 years in 2017, expectations are for more tangible results. For this, a stronger endeavour for cooperation, both by India and the region, will be essential.

Rajiv Bhatia is Distinguished Fellow, Foreign Policy Studies Programme, Gateway House, and a former ambassador to Myanmar.

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